Dubai launches first ETF trading platform

Dubai Financial Market (DFM) has launched a trading platform for exchange-traded funds (ETFs), the first of its kind in United Arab Emirates regional capital markets.

The platform offers integration and provides ongoing support to the burgeoning ETF industry, particularly market makers, authorised participants and liquidity providers, the DFM said in statement announcing its launch.

At the same time, Afkar Capital, the investment company that added the first ETF fund on DFM platform, has added Al Ramz Capital as new authorized participant and Cairo’s Beltone Financial as foreign liquidity provider for its Afkar S&P UAE UCITS ETF. This marked the first time a foreign market maker has been appointed as liquidity provider for a domestically listed fund in the Middle East.

Essa Kazim, chairman of DFM pointed to the recent approval of a new set of regulations that will “serve as a foundation for its new ETF platform”. “This follows the 2016 launch of the Afkar S&P UAE UCITS ETF and underscores our drive to further diversify our product offering for both local and global investors,” he said.

The Afkar fund, which is listed on DFM under the symbol “UAETF” (Bloomberg: UAETF UH Equity), launched in June 2016. It is the first physical, in-kind, liquid, fully fungible, fully tradable and transparent exchange-traded fund listed in the Middle East under the United Arab Emirates new regulations. UAETF offers exposure in three UAE markets: the Dubai Financial Market, the Abu Dhabi Exchange and NASDAQ Dubai.

UK and US investors

Afkar Capital’s CEO Seif Fikry said that since the fund was launched last summer, it has received a “strongly positive reception” not just in the Middle East, but also from the United Kingdom and the United States. “We are confident that our new partnership with Al Ramz Capital will further facilitate access to UAETF and expand the fund’s reach to local and global investors, fund managers and institutions with appetite for the UAE market,” he said.

UAETF has forged “strong partnerships” with Emirates Securities and Commodities Authority, DFM, the Abu Dhabi Global Market, Bank of New York Mellon, S&P Dow Jones Indices and is designed to replicate the S&P UAE BMI Liquid 20/35 Capped Index (Bloomberg: SPUAECAN). The index includes the largest stocks by capitalisation in the UAE, providing exposure to the UAE economy.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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